Going Undercover to Investigate Selling Test Strips for Cash

Written by Amy Tenderich
| Published on August 2, 2012

Maybe you've seen the "Diabetic Strips" signs on the side of the road in your state and also wondered what actually happens when you call one of the numbers listed... We wrote about organizations dealing in test strips cheap-for-cash in our post "Test Strip Charities" last year, but without the extra bonus of having an undercover "secret shopper" to check the service out. Now our talented cartoonist, D-Advocate and correspondent Mike Lawson offered to make that happen by following up on one of these surprising road-side signs.Read on to discover what Mike found out!

Special to the 'Mine by Mr. Mike Lawson

I felt like Woodward. No...I felt like Bernstein. Wait. Which one did Robert Redford play in All The President's Men? That's the one I felt like.

I was sitting in a McDonald's parking lot in Scottsdale, Arizona, waiting for a man named Marcus to meet me so I could sell a box of 50 test strips. I arranged this meeting by calling a phone number that I saw on a road-side sign in Phoenix that said "Ca$h Paid For Diabetic Strips."

It is not illegal for companies to buy and sell test strips like this — although the companies are required to register with the FDA and many fail to do so — yet this transaction still felt a little shady. When I called the number, for example, I wasn't greeted with a company name but just by a woman who identified herself as "Stephanie." Stephanie told me that there was no physical building for me to drop off the strips, but rather a courier would be sent to me.

Stephanie also told me that the price paid for strips varied based on the brand and the expiration date. So I could sell this box of One Touch strips that I purchased for $10 on my private insurance to this unnamed company for $20. And this same box of strips will sell for $40 or more online. But are the quality products?

For someone who is uninsured or underinsured, $40 for a box of strips that retails for $50 or more sounds like a deal. But David Winmill, a nurse practitioner and Certified Diabetes Educator that practices in Ogden, Utah, says patients need to be skeptical when they purchase testing supplies online from supply resellers.

"Patients need to question the integrity of the products they are buying online," Windmill said. "It's impossible to guarantee that the strips purchased from a third-party were maintained in a certain environment."

Test strips that are expired, exposed to heat, or used on a meter other than the one they were made for can produce inaccurate results. Despite the risks of using second-hand supplies, the soaring cost of being a healthy diabetic explains why this black market has developed.

People with diabetes (PWDs) are receiving test strips for free or highly discounted using Medicare, Medicaid or private insurance and then selling them to companies that will resell them to uninsured or underinsured people at a price that is still lower than retail price. The seller makes a little cash, and the buyer gets a nice discount, so everybody wins, right?

For example, take the case of Jenn Wilder, an Arizona woman who doesn't have health insurance and was diagnosed with pre-diabetes six months ago. She buys her testing supplies online because of the savings. "After doing a careful cost analysis, I realized that I could still buy supplies cheaper than the cost with health insurance," she said.

Wilder spends about $75 for 100 strips through an online retailer that she found through a Google search. If she purchased the same strips at a pharmacy, she'd pay about $125. She told me that if she discovered that the supplier had sold her defective or expired strips, she would simply find a new online supplier, because paying full-price for strips is not an option.

And it's that thought that brings me to where I was, going "undercover" to sell my own strips...

In the dark, empty McDonald's parking lot I started having second thoughts. I started thinking that maybe I hadn't thought this through. Do I need an alias? Do I need a trench coat or disguise? What if this is a setup? Just before I talked myself into leaving, a white unmarked Honda Accord pulled up next to me. It was Marcus, the courier.

Marcus, I learned, does not work for the company that purchases the strips or hangs the signs. "I'm just a courier," he said. The diabetes supply reseller pays a courier company that Marcus works for to pick up supplies. Marcus doesn't know bupkis about diabetes supplies; he's just the middle man.

As I signed a receipt on the trunk of Marcus' car, he pulled out a wad of cash and peeled off a $20 bill for me. He examined the box — they only buy unexpired and sealed boxes of strips and lancets. I asked Marcus if his courier company did a lot of pickups like this one. "This is about the only thing I pick up," he said. Wow.

When I revealed to Marcus that I would be writing an article about buying/selling the strips, he said that he had nothing to add. And (no surprise) I also had trouble getting anyone on the inside of this business to talk to me. When I attempted to contact five different online resellers to talk about safety concerns or get them to explain their processes, not one of them returned my emails or calls.

A slow economy and high unemployment rate has been bad for many Americans, and that is certainly true for PWDs. Winmill, the Utah CDE, said that he's suspected some of his patients have been using second-hand test strips and he knows some of his patients have cancelled appointments because they cannot afford the copayments. And he's had to delay necessary tests like cholesterol screenings because the patient can't afford it at the time.

Winmill recognizes that it is costly for us PWDs to stay healthy, so he's not placing any blame. "Most patients want to do the right thing. They want to help themselves." He believes that patients buying second-hand strips are just doing what is in their means to get what they need.

But what many patients don't know, Winmill says, is that their doctors and nurses can help them get through tough times. He suggested that before PWDs turn to test strip resellers on the Internet — or the side of the road — they try communicating with their healthcare providers.

"There are many resources that we have access to that can help patients receive the equipment and supplies they need from reliable sources."

Beyond test strip savings, patients in need can also apply for assistance from a handful of companies that make their drugs. These include Lilly Cares for discounts on Humalog insulin; Novo Nordisk's Cornerstones4care program for Levemir and Novolog insulin; and Sanofi's Patient Connection for Lantus and Apidra. Some other options for savings on diabetes meds can be found here.

Note that these saving programs go require a co-signature from your healthcare provider, and the insulin or meds provided is shipped directly to the provider's office for you to pick up.

So maybe you're not saving directly on glucose strips, but we'll take the help wherever we can get it, right?

While it was kind of an adventure, I personally plan on speaking to my healthcare team or looking into some of the prescription assistance programs before turning to the seedy world of trench coats, couriers and McDonald's parking lots again.

Disclaimer: Content created by the Diabetes Mine team. For more details click here.

This content is created for Diabetes Mine, a consumer health blog focused on the diabetes community.
The content is not medically reviewed and doesn't adhere to Healthline's editorial guidelines.
For more information about Healthline's partnership with Diabetes Mine, please click here.

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Archived Comments

Leighann of D-Mom Blog|2012-08-02

You mentioned the prescription savings plans for insulin, but many of the test strips companies also offer savings cards that offset the cost of strips by as much as $50 per month. We use the FreeStyle Promise program which can save a patient up to $600 per year. This program is not based on financial need, you use it at the pharmacy, and there is nothing that your physician has to do in order for you to participate other than write a prescription.

Scott E|2012-08-02

Unfortunately, this is why it's so hard to get good insurance coverage for a sufficient quantity of test strips, because the savings don't always go to the insured. we almost need strips that are paid (in part, at least) by a 3rd party to be sold with non-removable Rx labels; so the secondhand buyer either gets the name and address of the immoral strip-seller or they get a mangled box. It might be enough to discourage the practice.It might also drive down the prices so that the un/under-insured don't need to resort to buying strips at McDonalds.

nora|2012-08-02

Low-income patients should also contact their local free clinics (see www.nafcclinics.org for a nationwide listing), federally-qualified community health center, or city/county health department. They may qualify for free or deeply discounted healthcare, including meds and testing supplies.

Cara|2012-08-02

Creepy. :/

Dutch Heetbrink|2012-08-02

And the there is the recently introduced Relion Prime at Walmart with 50 Strips for $9.

Hope W.|2012-08-02

What you did was insurance fraud, right? You admit you bought your test strips for $10 through your private insurance and then re-sold them for $20. Is this somehow right just because you wrote an article about it? This makes me so angry! I have enough trouble getting the testing supplies I need without reading an article like this!

Scott S|2012-08-02

It seems to me this could be considered insurance and/or Medicare/Medicaid fraud. The notion that this hurts no parties is flawed ... in fact, the insurance company eats the cost (or Medicaid/Medicare) for the strips which should be used by patients, and in turn, that means they pass those costs on to those who buy their services (which is usually employers, who are now "sharing" the cost increases they're getting with employees with higher co-pays and deductibles). According to data from the U.S. Bureau of Labor Statistics, the long-term average U.S. Health Care Inflation Rate was 5.56%, which is higher than the overall inflation rate. Some patients are willing sell their supplies because they aren't using them (if they aren't they really shouldn't receive them in the first place). However, healthcare fraud is not a victimless crime, we all pay for it in higher prices. People should think about that the next time they pay a deductible, co-pay or the cost of healthcare in general.

Jay Kauffman|2012-08-02

so far no-one has mentioned the elephant in the room, the blazingly obvious fact that $125 for a bottle of test strips if you are uninsured is price-gouging and should be against the law, and would be against the law if laws weren't made to order based on lobbying powerwhich is based on cash powerwhich is based on the fact that pharmaceuticals are able to get away with continually continually raising prices to ever-increasing levels of obscenity and barely get more than a "that's just the way things are" from the pharmacy-going public as they deal with sticker shock every time they pull out their credit cardIt's a vicious and very profitable circle of greed.....in this article it mentions:"In Forbes' list of the world's leading companies, pharmaceutical companies have profit margins averaging 20 percent, whereas the average profit margin for the 2,000 leading companies worldwide is 8 percent."http://www.rxrights.org/your-thoughts/where-are-drug-company-profits-really-goingSo yes, someone who needs a bit of extra cash because they decide they don't need all of their test strips can earn 10 bucks and that's low-level gaming of the insurance systemand yes, someone who can't afford a criminally overpriced product that they need in order to survive is forced to order it for $50 bucks less online, or perhaps break the unfairly upheld law and order it from Canadabut the creators of the product can just continue merrily along with their 20% profit margin and offer a few token charity programs for people who are able and willing to jump through the hoops and prove that they are close enough to abject poverty to get some limited "help"Just because it's legal doesn't mean it's moral

Mike Lawson|2012-08-02

Scott-Your point is incredibly valid...there's no such thing as a free strip. This article focuses on the process, and I haven't yet jumped into who is picking up this slack. I never meant to portray this as a "victimless" crime, and I'm glad that you added this.

Tim|2012-08-02

The other elephant in the room is that healthcare in this country is more about business than the customer. I remember a time when pharmaceutical companies and medical supply companies got into business because they saw a NEED for the product because PEOPLE were suffering needlessly. People who find companies whose FIRST goal is better outcomes for their customers will always reward them with their patronage and loyalty.

Betty|2012-08-02

I just saw one of these signs and wondering about how legal it is. It's illegal to sell other prescriptions, so I figured it would for test strips too... if course, Jon never has left overs.

AmyT|2012-08-02

@HopeW - we were investigating something we think is kind of shady, as the article mentions. Obviously, none of us makes a practice of reselling our supplies in this way. You can certainly be angry at the outfits that do the shady dealing, but please don't shoot the messenger here...

Mike Lawson|2012-08-02

Betty - Test strips actually do not require a prescription for purchase. The prescription you received for Jon's strips is used by the pharmacy to bill your insurance company.

Eileen|2012-08-02

I'm a type 1 of 49 years duration (and doing well) who went on Medicare recently. Medicare requires that patients using more than 100 strips a month submit their test results to the pharmacy. The pharmacy has to copy them and send the copies to Medicare. Can you imagine! I got mad and now am buying an extra 100 test strips via Amazon. This mess is another result of the strip dealers you describe. Maybe Amazon's strips are coming from Medicare patients, heh-heh.

Sam|2012-08-02

I have several thougts on this. First, as usual the evil pharmaceutical companies get blamed by many people. People complain about the profits and want the medical field to be in it only to help people. That is naive. It would be wonderful if that was the truth, but businesses want, need, must make money to survive and grow, and perform needed research etc. It is human nature, and if one company did not strive to make as high of profit as it could, it would not be able to grow and/or be gobbled up by the next one who had that desire. It is a simple rule and proven time and time again. The problem is not the pharmaceutical industry. They are just operating to maximize themselves under the rules of the current system. The problem is the Health Insurance Industry. Why are they even there? There is NO NEED for a third party payor. It interferes all laws of the free market and the result is what we have today. I can empathize with the lifetime costs of a chronic disease and to add to the personal examples mentioned in the comments of how crazy our system can be, I recently changed jobs mid June. I was told my medical coverage would go through end of June when my new insurance plan would kick in. Except the HR rep I spoke with at my former company was wrong. They had "changed the policy" and now I was only covered until the day I left the company. Oops. So I ended up being denied by my former employer's plan for my Endo appt. I received a denial letter from BCBS stating my Endo could bill me $1,200 for this basic quarterly visit/labs. After I calmed down, I called my Endo and explained the deal to them and they said they would give me the "private pay rate" of $196. What? You mean out of the kindness of their hearts they will accept over $1000 less than they would get from BCBS?? Of course not, but in this rediculous system, the providers are able to, and in most cases, must overinflate the rates so much to negotiate a payment they can operate and grow on, that it is just insane. Take out the middle man, aka Third Party payor, aka Health insurance and the system begins to make sense and return from the land of crazy. Granted $196 is a steep cost for an hour visit, but one that I'd be more than happy to pay if it would help me continue to be free of Type 1 complications after 35 years of this disease. The rise of health insurance began with government intervention into our healthcare in 1910 with the Flexner Report via which the governement basially drove out of business all the practictioners who did not practice as the government saw fit. Then to further the cause during WWII, when the GOV'T put a wage freeze on companies. So, to get around this, the companies started paying for employees healthcare costs. Yes, we need a safety net for the underpriviledged etc, but if we could truly reform HealthCare in this country instead of the charade that is Obamacare, we could offer a way to improve our current situation.I'm not blaming D'Mine for insurance fraud at all like one of the commentors. I applaud the initiative in this project. Very interesting. But those that practice in this most DEFINITELY are committing insurance fraud. Everyone most certainly does not win in this system. Yes, the consumer often loses out as the article mentions. But another victim here is the taxpayors who pay for BILLIONS of waste in Medicare and Medicaid $ each year. I am a healthcare provider and I see it all the time in the Rehabilitation industry. Great article, but I wish all would realize the real evil empire here. The Health insurance industry maybe, but actually we can't even blame them. They were just filling a void and trying to run a business to take advantage of the problem with the free market that was created when the GOVERNMENT interfered with the system. They met the demand created by the interference of government in the free market. As the Austrain Economist Murray Rothbard wrote in 1995, "And so, our very real medical crisis has been the product of massive government intervention, state and federal, throughout the century; in particular, an artificial boosting of demand coupled with an artificial restriction of supply. The result has been accelerating high prices and deterioration of patient care. And next, socialized medicine could easily bring us to the vaunted medical status of the Soviet Union: everyone has the right to free medical care, but there is, in effect, no medicine and no care."Good food for thought, and I would love if we would all at least consider this issue and pay attention. Read, learn and broaden our understanding of this issue. Don't just let the Networks and the machine tell us what is the problem. The fix is not easy. Most great solutions never are. But if we use our minds and it is right before us.

Susan Whittier|2012-08-03

When I first read this comment / message re 'stix' I held my breath and thought - I have a third world country living next door. The Canadian medicare setup is definitely not perfect, but it was realized a long time ago that if the PWD has the tools to mange their condition to the best of their ability, i.e. to stay healthy, in the long run it will be cheaper for the whole taxpayer population and there will be more contributing to the community at large - rather than soaking up its welfare / medicare / homecare / palliative care. Statistically speaking it looks like the USA has a population equivalent to Toronto Ontario of PWD's - man/ woman and child. Scary. Having lived with this condition for as long as I have,[59Y/8mo] I will state again the use of the strips for blood glucose monitorig is not ideal, but at this point in time, unless you have financial backing this is still the cheapest / easist way to monitor day to day the diabetes situation. I can only hope your third world situation changes soon - isn't there an election on the horizon????

MIkeM|2012-08-03

At WalMart, you can get the new RelyOn Prime 50 ct test strips for $9.00Problem solved

Jay Kauffman|2012-08-03

Well, problem not exactly solved but at least we get to see something closer to the actual retail value of the strips.If they can make a profit at 9 bucks, then there's something a bit fishy about charging 8 -10 x the amount.and the heirs to Walmart are obviously not hurting from this arrrangement---they are worth more than 40% of Americanshttp://www.huffingtonpost.com/waltons-net-worth_n_1680642.html

Jay Kauffman|2012-08-03

people who sell their test strips, as I see it, are cheating themselves more than anyone else....the reason insurance covers test strips, which as you note, don't require a prescription, is that they want you to take care of yourself, so that you have less expensive complications later on--which they know will cost them a LOT more than the test strips. If you don't use your test strips and thus have out of control bgs, and end up costing the insurer a lot more money down the road, you're contributing to an increase in the price of insurance, not to an increase in the price of test strips. Is my logic sound? and of course, you're cheating yourself of health. Jay

Kevin L McMahon|2012-08-20

As a researcher in the field of diabetes, readers might be interested in knowing that this black market of test strips is the go-to source for many research trials. Back in 2007 or so I was the first and only researcher to get a contract with Lifescan to buy test strips at the Medicaid price from an FDA registered distributor. Without that special agreement I would have had to pay nearly twice as much. It was Lifescan's hope that this agreement could bring more research programs into the light and out of the black market. Sometimes research programs at universities and hospitals get free test strips from the manufacturers but since 2009 the days of free have pretty much expired. I don't know about you but this fact doesn't make me feel that good about the quality of diabetes research.

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